Over the past year, BlackRock, Charles Schwab(SCHW) and Vanguard all slashed prices on their ETFs as they race to snatch up the growing number of investors who are trading in their mutual funds for the more tax-friendly investment.

Last month, Charles Schwab announced that it was offering 15 of its own ETFs commission-free, along with 90 ETS from providers, including Guggenheim Investments, PowerShares, State Street(STT), ETF Securities and United States Commodity Funds.

Investing strategies with low tax costs

While Fidelity and BlackRock are not offering as many free ETFs as Schwab, Fidelity's president of personal investing, Kathleen Murphy, said the firms will continue to review the number. She also noted that the ETFs currently being offered are part of iShares's core products, which are highly liquid and appeal to a broad range of investors.

As part of the partnership, Fidelity will also create new ETF portfolio strategies using iShares ETFs and provide ETF research and analysis tools.